Lincoln Joint Stock Land Bank v. Bexten
| Decision Date | 29 September 1933 |
| Docket Number | 28562 |
| Citation | 250 N.W. 84,125 Neb. 310 |
| Parties | LINCOLN JOINT STOCK LAND BANK, APPELLANT, v. JOHN H. BEXTEN ET AL., APPELLEES |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Douglas county: WILLIAM A REDICK, JUDGE. Reversed.
REVERSED.
Syllabus by the Court.
1. A fact, relation, or state of things once shown to exist may be presumed to continue until the contrary appears.
2. When the holder of a negotiable promissory note, secured by a real estate mortgage, as collateral security for a debt, upon default of the payor thereof, acquires by judicial proceedings or conveyances in lieu thereof the legal title to the premises thus mortgaged, if the mutual relations of creditor and debtor between the principals to the transaction remain unchanged, the land so acquired is deemed substituted for the note and mortgage and remains subject to redemption.
3. In such event, the holder of the legal title resulting from such transaction would acquire the rights of, and be properly designated as, a mortgagee in possession.
4. Where a national bank has lawfully acquired an interest in real property in satisfaction of, or as security for, its debt then existing, it may purchase other undivided interests therein or incumbrances existing thereon, or in its corporate name may lawfully covenant to pay a lien on the land thus acquired by it.
5. Except as to the execution of negotiable instruments and obligations under seal, an undisclosed principal is bound by simple contracts made by the agent, when the acts done by the agent are within the scope of his authority and in the course of his employment. This rule is applicable to national banks subject to the limitations of the National Banking Act (12 USCA § 21 et seq.).
6. The taking of real estate security by an agent of a national bank in his individual name for the benefit of the bank is in legal effect but the taking of security by the bank itself, and such contracts, duly authorized and entered into, create and impose identical rights and liabilities as like instruments executed in the corporate name of the bank.
7. Generally, one dealing with an agent of an undisclosed principal may, after disclosure, sue either the principal or the agent, or join them both. The fact that the contract is required by the statute of frauds to be in writing does not affect the general rule.
Appeal from District Court, Douglas County; Redick, Judge.
Suit by the Lincoln Joint Stock Land Bank of Lincoln against John H. Bexten and others. From a judgment dismissing the suit, plaintiff appeals.
Reversed and remanded.
Good, Good & Kirkpatrick, Brogan, Ellick & Van Dusen and James J. Fitzgerald, Jr., for appellant.
Finlayson, Burke & McKie, contra.
Heard before GOSS, C. J., DEAN, GOOD, EBERLY, DAY and PAINE, JJ., and MESSMORE, District Judge.
This is an appeal by the Lincoln Joint Stock Land Bank of Lincoln, Nebraska, from the order of the district court for Douglas county sustaining the separate general demurrers of defendants Mary A. Bexten and the First National Bank of Omaha, Nebraska, to its petition, followed by a judgment of dismissal as to these defendants on the election of the "Land Bank" to stand on its petition as amended.
This is a suit at law by plaintiff upon a written contract which, by its terms, purports to have been executed by plaintiff, as party of the first part, and by John H. Bexten and Mary A. Bexten, as parties of the second part, and to modify the terms and conditions of a certain note and mortgage covering Iowa real estate therein described, and the payment of which as therein modified is assumed by the parties of the second part. The amount of the recovery sought is $ 10,916.47 with interest at 8 per cent. per annum from and after November 28, 1931, being the amount of the deficiency remaining unsatisfied after the foreclosure of this mortgage in a proceeding in equity in the district court for Monona county, Iowa, the sale of the premises embraced in said mortgage by order of the Iowa court, and the application of the proceeds thereof in satisfaction of the indebtedness then and there by that court adjudged to be due and unpaid.
The following constitute a summary of the facts of the transaction alleged in the petition demurred to:
On June 11, 1919, one Lacey and wife executed, as owners of the fee, a real estate mortgage on section 14, township 84, range 43, in Monona county, Iowa, to plaintiff to secure the repayment of a loan of $ 35,000 contemporaneously made to the mortgagors. This mortgage was a first lien on the premises described. The indebtedness secured bore interest at 6 per cent. per annum, and, with interest as it accrued, was payable in semiannual instalments of $ 1,225 each on the first day of October and the first day of April of each year. On the 7th day of April, 1923, the mortgaged lands were conveyed by the then owners to John H. Bexten. On September 10, 1926, a new contract in writing, already referred to, was entered into by and between the Lincoln Joint Stock Land Bank and John H. Bexten and wife, Mary A. Bexten, which, by its terms, reduced the rate of interest from 6 per cent. to 5 1/4 per cent. payable semiannually, resulting in the reduction of the semiannual payments to be made thereafter to $ 960.93. This written agreement also stipulated for an acceleration of the maturity of unpaid instalments in the event of default in the payment of any one of the instalments; that after five years from the date of the agreement the "mortgagor" had the option of paying in advance upon any regular instalment date any number of payments on account of the principal of this loan, etc.; also, "Party of the second part agrees to make said payments as herein provided and the said original note and mortgage shall continue in full force and effect as originally made except as extended and modified by this agreement." All instalments were paid as they became due until April 1, 1931, when default was made. Plaintiff commenced its action in foreclosure in the district court for Monona county, Iowa, on May 4, 1931, upon the mortgage executed by Lacey and wife and as modified by the written agreement of September 10, 1926, executed by John H. Bexten and Mary A. Bexten, his wife. Bexten and wife and the First National Bank of Omaha were parties defendant in said action. Bexten and the First National Bank were served with process in the state of Nebraska only, as nonresidents of the state of Iowa, and neither made a personal appearance in said action; but process was duly served on Mary A. Bexten in Iowa. On October 5, 1931, a decree of foreclosure and sale was entered in this proceeding. It determined the amount due, directed that the mortgaged lands be sold on special execution to satisfy the same, and directed that judgment be rendered in favor of the plaintiff and against the defendants (who had been personally and properly served within the state of Iowa) for any deficiency that remained after such sale, and the application of the proceeds of the sale to the satisfaction of the amount adjudged due, with costs. Sale was duly made on special execution as directed, and the proceeds thereof applied on the judgment entered, leaving a balance unsatisfied amounting to $ 10,916.47. The laws of Iowa governing the foreclosure of real estate mortgages are pleaded by plaintiff, but it is alleged that a personal judgment as authorized by the decree pleaded was in fact entered against Mary A. Bexten, and is and remains in full force and effect, but it is not alleged that a general execution has been issued on the decree of foreclosure against the defendants or any of them. It is expressly alleged "that, as this plaintiff is informed and verily believes, said title so conveyed (on April 7, 1923) was in fact taken by the said John H. Bexten as agent for and for the use and benefit of the defendant First National Bank of Omaha, Nebraska, and that all of the acts and doings of the said defendant Bexten from and after said date, in connection with the said land and the mortgage indebtedness thereon owing to this plaintiff (including the agreement in writing of September 10, 1926) were done and performed by the said John H. Bexten as agent for and for the use and benefit of and with the intention to bind the said defendant First National Bank of Omaha, Nebraska." It is also alleged as a matter of ratification that all payments of instalments of indebtedness after September 10, 1926, were made by the First National Bank out of its own funds, and that it has received and enjoyed all rents and profits arising out of the mortgaged premises. The plaintiff, by leave of court obtained, amended the foregoing petition by adding thereto the following: "That prior to acquiring the title to the said real estate in the name of the defendant Bexten, the defendant the First National Bank had acquired a junior mortgage upon the said real estate, which mortgage had been transferred to the said bank to secure it upon a preexisting indebtedness upon a loan made to one of its customers, and its act in acquiring the title to the said real estate to be taken for its use and benefit in the name of the defendant John H. Bexten was intended to secure the payment or further security of its said loan." To this petition demurrers, on the sole ground that the petition does not state facts sufficient to constitute a cause of action against the appellees severally, were sustained by the trial court.
In consideration of the case before us, it is to be kept in mind that the amendment to the petition, made on April 8, 1932, in so far as the facts therein are alleged, is controlling, and is not to be limited by the conclusions of law and facts set forth in the...
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